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From Traditional IDs To Blockchain-Based Digital IDs

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Blockchain technology has proven to be very useful as we recount the positive strides garnered in technological advancements. The fourth industrial revolution and many of its technologies require the integration of blockchain technology to satisfy all of its usefulness.

The past 13 years have seen blockchain technology evolve into myriad uses — finance, data, logistics and security, among others. However, the idea of using blockchain’s immutable capabilities to ID humans got new life when Changpeng “CZ” Zhao visited the island country of Palau to kick off its digital residency program.

The blockchain identity management market is estimated to grow by $3.58 billion in the span of five years from 2021 to 2025. Key factors validating this estimate include the rising demand for digitalization and privacy-respecting identity solutions. As a result, a myriad of solutions breached the market serving this need in the form of nonfungible tokens (NFT), distributed ledger technology (DLT) and barebone blockchain technology.

Considering the overabundance of uses of blockchain technology on a day-to-day basis, numerous government organizations began experimenting with the technology — weighing heavily on central bank digital currencies (CBDC) and verifiable and immutable user identity.

Concerns With Traditional IDs
Traditional Paper-Based IDs
It is difficult to confirm the legitimacy of paper identification in different systems due to the possibility of falsification. History has shown how people successfully use fake IDs to claim unauthorized access to a myriad of benefits. However, advances in technology such as blockchain have given authorities the ability to issue verifiable certificates and credentials while ensuring the scalability, speed, and security of the identity management

Valid identification
Continuous advancements in technology have given the general public tools to create identifiers that are visually identical to the original. Given blockchain’s ability to store immutable records, this stands a chance to combat identity theft and counterfeit fraud.

In efforts to mitigate the risk of falsification of identifiers, the blockchain is bringing to fall various blockchain-based digital ID offerings. For example, Shubham Gupta, an Indian Administrative Service (IAS) officer, recently spearheaded the launch of a Polygon-based system to issue verifiable caste certificates on behalf of the Maharashtra government.

“If identity management systems are to be rated on a scale of 0 to 1 based on decentralization and individual control, traditional centralized ID systems will be at the extreme. left and fully self-hosted, based on a public blockchain. ID on the far right- Gupta speaking to Cointelegraph.

Blockchain-Based Identification
Blockchain technology can and has been used as is to keep immutable records on the internet, innovations over the past decade have resulted in the birth of sub-ecosystems around the use of blockchain technology.

“The idea of ​​blockchain-based digital IDs has been floating around for a while, but it came into the limelight with the recent NFT boom,” said Brenda Gentry, blockchain advisor and CEO of , to Cointelegraph.

While NFTs was first marketed as a tool for representing real-world objects, including intellectual and physical assets, the technology has proven to be well suited for a variety of applications. Recently, government organizations have started testing NFTs to identify citizens to reduce operational costs.

“Mass implementation of blockchain-based digital IDs – such as issuing national IDs such as passports and driver’s licenses – takes time, but I firmly believe it is the destination towards which the world should be heading,” Gentry added.

In addition to helping authenticate people, blockchain technology discourages attempts at counterfeiting, tampering, or impersonation.

Citing the involvement of luxury brands and artists who have promoted the use of NFTs to authenticate the legitimacy and ownership of a product or art, Gentry opined that “luxury items can be verified for their authenticity on the chain, which eliminates the risk of owning a counterfeit. product.”

Benefits Of Blockchain-Based IDs
The benefits of Blockchain based IDs include ease of reducing the misuse of information, ensuring verifiability, and traceability, and bringing about uniqueness which is one key benefit brought by blockchain. “All digital ID can be verified on the blockchain and can be traced back to the owner’s account which can also be used to know your Customer,” Gentry added.

Challenges Adopting Blockchain-Based IDs
Some challenges include a lack of education among the masses and a supportive regulatory environment.
The creation of pro-crypto regulations will need greater intervention from industry players to help countries and institutions get onboarded onto the blockchain network.

However, no matter how decentralized blockchain technology may seem, it will need attestation or recognition by the issuing authorities. “if the issuing authorities don’t recognize the validity of the blockchain IDs, then the same cannot be used for availing a majority of public services.

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We are the same, we may only be different in our experiences, values and exposures. Technology is a big part of my experience, learning is one of my values and writing my credible means of exposure.
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